Hello community! Since we are in a low liquidity weekend, it is the perfect time to understand one of the most powerful metrics: The Funding Rate.
💡 What Does the Funding Rate Measure?
It is a small periodic payment that traders make to each other in perpetual futures markets (like those on Binance). Its function is to keep the futures price aligned with the spot price of BTC.
🚨 The TOP 1 Strategy (The Secret):
When the Funding Rate is extremely high and positive (above +0.03%), it means there is too much Long (bullish) leverage. The market is "overheated" and is more vulnerable to a sudden drop to liquidate those traders.
➡️ Strategy: Be careful about opening new Longs when the Funding Rate spikes! The opposite movement may be imminent.
💬 Educational Question!
Do you usually check the Funding Rate on your exchange before taking a leveraged position, or do you only focus on the chart?
Comment if the Funding Rate has saved you from a liquidation! 👇
#FundingRates #EducacionCrypto #BTC #BinanceSquare $BTC
